iFest organizers hoping to climb out of financial hole

A likeness of Australia's Sydney Opera House takes shape Thursday in Sam Houston Park amid preparations for this year's iFest.

A likeness of Australia's Sydney Opera House takes shape Thursday...

The 44th annual Houston International Festival kicks off this weekend with planners hoping it will help them climb out of a financial hole that last year forced them to pull out of the city's Thanksgiving Day parade.

"People are going to see a festival that's renewed and refreshed a bit - the festival they remember," said Kim Stoilis, president and CEO of the Houston Festival Foundation. "I'm all about legacy," she said, "… not letting a 44-year-old tradition die."

Last year, Stoilis, who replaced longtime president Jim Austin in late 2011, had to rely on advances from the city and the Houston Arts Alliance, which is funded by local hotel occupancy taxes, to cover the up-front costs of the festival.

Heavy rain on one day of the two-weekend event slashed revenues and left the group unable to pay some vendors on schedule, according to emails between the group and city officials. With expenses outpacing revenues by about $250,000, the nonprofit found itself more than $725,000 in debt, according to federal financial disclosure forms filed that summer.

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Outside of event- planning circles, few knew of the group's challenges until August 2013, when the foundation announced it no longer could afford to produce the Houston Thanksgiving Day Parade, which it took over in 1995.

Money for this year's event still is tight, Stoilis admitted.

The group says it has paid off more than $150,000 of its debt, but still owes $400,000 on two lines of credit and an additional $150,000 to its vendors.

Included in the organization's debt repayment is a check written last month to pay the rest of $80,000 owed to the city of Houston for last year's festival, according to Susan Christian, director of the mayor's Office of Special Events.

She said the group is in good standing on this year's event and has provided a $20,000 cashier's check for its grounds and event deposit.

"We're approaching the event very positively," Christian said. "They have more sponsors this year so I think they're on a better foundation."

Arts Alliance upbeat

Leadership at the Houston Arts Alliance shared Christian's confidence that the festival would go on.

"Kim Stoilis is a proven arts administrator," said the alliance's president, Jonathon Glus. "We have confidence in her ability to continue to improve the festival's financial viability, as well as its importance to the community."

In the past year, all staff besides Stoilis were laid off or switched to contracts. More volunteers and board members were recruited. After selling its Thanksgiving floats to the city of Hidalgo, the group moved into a warehouse one-fourth the size of its previous space.

Robert Navarro, who has served on the foundation's board for decades, emphasized that the financial improvements have not been at the cost of the festival's quality. A good event, he said, leads to revenues that can pay off the debt. He also highlighted a new budget that, for the first time in years, does not assume the weather will be great or that turnout for all four days of iFest will be high.

"It won't entirely save us this year, but it's a start," Navarro said.

Stoilis said this year's festival, which celebrates Australia, includes stage enhancements, an expanded living museum and a return to the renovated Sam Houston Park.

The festival foundation says it budgeted for about $1.8 million in revenue and a similar amount in expenses for the fiscal year that started July 1. Before Stoilis took over, the foundation spent an average of $3 million on both events, staff and its education programming in area schools. It spent between $1.6 million and $1.8 million on iFest.

'Totally committed'

Stoilis said the goal is to be debt-free within four years, or at least before the festival's 50th anniversary in 2020, which they hope will rival the spirit of their Texas sesquicentennial celebration in 1986.

Ken Eagle, a festival consultant and former financial management leader with BP, said the group has work to do first, but has been diligent while coordinating with the Executive Service Corps of Houston to update its budget and undertake long-term planning.

The corps is a nonprofit group that provides consulting services to other nonprofits. Eagle, a volunteer, is one of several consultants who have worked with the festival foundation and sat in on board meetings as the group has charted a new course in recent months.

"They're totally committed," he said. "They recognize they had an issue to deal with in terms of the debt and they've been very focused on getting that done."